The Africa Channel plans to make Nigerian films available in the US, Canada and the Caribbean in early 2022, Brendan Gabriel, the channel’s ... vice president of production and creative director, tells The Africa Report.
Nicolas Terraz, who has been at the helm of TotalEnergies’ exploration and production branch south of the Sahara since July 2019, has had to deal with the logistical and economic disruptions caused by the Covid-19 pandemic, which led to sharp fluctuations in crude oil prices.
He also has had to cope with the security situation in Mozambique, which forced him to suspend his gas megaproject in the northern part of the country. Not to mention the fact that the company’s financial partners did not approve of its extractive activities, especially those taking place in Uganda.
The group’s CEO, Patrick Pouyanné, announced in mid-2020 that budgets would be reduced. What are TotalEnergies’ current ambitions in terms of exploration and project development in Africa?
Nicolas Terraz: In 2020 and early 2021, we mobilised so that we could ensure that the projects that had already been launched would be able to continue. In Angola, where we remain the leading operator, we have initiated Zinia phase 2, a short-cycle project connected to the Pazflor FPSO floating production unit. In Nigeria, we are continuing with the Ikike project and participating in Nigeria LNG’s seventh liquefaction train.
We are more selective in terms of exploration, as our overall budget has been reduced from $1.5bn in 2019 to $800m in 2021. In Africa, as of this year, we have three major exploration wells: Angola (Block 48), Côte d’Ivoire (Barracuda field) and Namibia (Venus block).
We also plan to explore Block Marine 20, in the Republic of Congo, in the near future.
In South Africa, where we have made significant offshore gas discoveries in the Brulpadda field [in the southern part of the country], we are currently in discussions with the authorities about marketing gas to meet demand in the Mossel Bay area [between Port Elizabeth and Cape Town], where the state-owned PetroSA liquefaction plant is located.
What is the status of your $10bn Ugandan mega-project? Are you concerned about it, given that you have not completed the financing and that three major French banks – Crédit Agricole, Société Générale and BNP – have backed out, mainly due to environmental concerns?
This project’s status is not at all in question. In fact, it has already started. We concluded the contractual framework with Uganda and Tanzania in April and May, which allows us to commence work. Discussions about financing are ongoing, but this is not unheard of for a project of this size.
I’m not worried, things are going well. Our goal is to start production in early 2025. The main contracts are currently being awarded, engineering work has started and will last throughout 2021. The actual construction of the plant and pipeline will start in 2022. Before that, we will need to install a coating plant in Tanzania to insulate the pipeline.
Nevertheless, several NGOs are concerned about the expropriations carried out to allow the extraction and construction of the 1,400km pipeline that will cross Uganda and Tanzania…
First of all, when Oxfam and the FIDH [International Federation for Human Rights] approached us, we did not play dumb. We studied their reports and listened to their recommendations. We paid particular attention to the environmental and social concerns that were raised.
The area of land adjoining the Murchison Falls National Park [northwest] has been deliberately reduced from 9% to 1%. This project actually has one of the lowest carbon footprints in our portfolio, since it uses solar energy for part of its needs and a buried pipeline!
Your other major sub-Saharan project in the works, Mozambique LNG, which had $20bn in planned investments, was halted overnight after an attack by armed groups. When is it due to start up again?
You can’t stop and go on a project of this size, which requires 5,000 to 15,000 people on site. It was inevitable that it would be suspended given Cabo Delgado’s deteriorating security situation.
This is a case of force majeure. We are currently discussing how best to manage this situation with our subcontractors. It will impact the schedule for at least a year.
President Nyusi met with Patrick Pouyanné in Paris in May, on the sidelines of the Africa-France summit. Do you think Maputo can resolve this crisis?
The authorities clearly understand the extent of the problem and know that we will only return once sustainable security can be assured. We know that they are currently working with their neighbours in the southern African region and other partners.
More broadly, we are very optimistic about the continent’s gas prospects. Natural gas is an effective complement to renewable energy, as it is well suited to power generation and emits half the CO2 emissions of coal. Although the Mozambique LNG project has been suspended, we remain fully committed to developing gas reserves in Area 1. TotalEnergies is not leaving Mozambique!
What does the name change, from Total to TotalEnergies, really mean for your company’s strategy?
The name TotalEnergies encapsulates our transformation into a multi-energy company, one that is active in electricity, renewables – solar and wind in particular – biofuels and hydrogen. By 2030, we hope to be one of the world’s top five renewable energy producers.
However, you have launched fewer renewable energy projects and made fewer acquisitions in Africa than you have in India, Europe and the US…
We are already involved in solar projects in South Africa, Egypt and Kenya. We are also currently recruiting “renewables explorers” in all the countries where we are present, who will be tasked with identifying African opportunities.
Our partners, in particular national operators such as Sonangol in Angola and NNPC in Nigeria, are very keen to cooperate with TotalEnergies in these fields.
Doesn’t this energy transition – which you say is ambitious – ultimately mean that you will drastically reduce how much you invest in oil exploration and production in Africa?
By 2030, we will not increase our oil production, but rather remain at this level. So we will still need to invest in extractive projects to compensate for the natural decline in producing field volumes, which is 4% to 5% per year globally. But we will be more selective.
In Africa, just like elsewhere, we are focusing on oil projects that cost less than $20 per barrel, including capital and operating costs. Furthermore, all our new projects will have a lower carbon intensity than our current portfolio [around 20kg of CO2]. Our Tilenga project in Uganda already meets these criteria: 13 kg of CO2 and a technical cost of $11 per barrel.
We are also reducing greenhouse gas emissions from all our oil and gas facilities, both on the continent and elsewhere. In terms of offsetting, our recently launched natural carbon sink in the Republic of Congo [40,000 hectares of new forest over 20 years] is meant to inspire others in Africa.
Our goal is very clear: to reduce net CO2 emissions from our oil and gas operations by 40% by 2030 compared to 2015 and to achieve carbon neutrality by 2050 for all our global activities. In short, TotalEnergies means more energy and fewer emissions.
Understand Africa's tomorrow... today
We believe that Africa is poorly represented, and badly under-estimated. Beyond the vast opportunity manifest in African markets, we highlight people who make a difference; leaders turning the tide, youth driving change, and an indefatigable business community. That is what we believe will change the continent, and that is what we report on. With hard-hitting investigations, innovative analysis and deep dives into countries and sectors, The Africa Report delivers the insight you need.View subscription options